If you’re running a business, chances are you’ve heard of Arizona’s Proposition 206, The Fair Wages and Healthy Families Act that passed in November of 2016. This law mandates two changes for employers in the state, both effective on or before July 1st, 2017 (Phoenix Business Journal). Prop 206 mandates the following adjustments in employer pay requirements:
Hourly pay minimums will continue to increase until January of 2020, with a cap on hourly pay at $12 per hour. If you’re an employer located in Flagstaff, AZ, however, you’ll be required to pay a higher minimum wage ($12 per hour) effective on July 1st 2017, as voted on in Proposition 414. This Flagstaff minimum wage will undergo increases up to $15 per hour through 2021.
The second component of Proposition 206 requires that employees accrue paid sick leave at a minimum rate of one hour of paid sick time per every 30 hours worked.
Companies with fewer than 15 employees:
Employers must grant and allow the use of 24 hours of paid sick time annually
Companies with more than 15 employees:
Employers must grant and allow the use of 40 paid sick hours annually
Although there is no federal rule requiring all private employers to provide paid sick leave, the past several years have seen a movement at the state and local level to require it. Eight states and several cities now have laws providing paid sick time for employees. The laws vary by location and generally include very specific instructions as to how and when the time can be used by employees.
Paid sick time is a relatively common benefit offered by employers, with 64% of employees in private industry having some paid sick time in 2016 (US BLS). Employers who offer paid sick time see fewer employees coming into work sick, which slows the spread of illness among co-workers. Employees with paid sick time are also more likely to seek preventive medical care, whereas employees without it are more likely to postpone medical care and may be forced to seek care after hours in more expensive settings like emergency rooms or urgent care facilities.
There are many nuances to this law that may be difficult to navigate including how to classify your employees, providing payroll documentation and simply understanding measures to take to prepare your business in order to be ready for July 1st. In hopes to ease your transition, specialists from our Time & Attendance team are hosting a live webinar on Proposition 206 to go walk you through these changes and address your questions in real time – register to join us today!